Fed's Global Harvest Attempt Backfires with $200B Loss

Introduction

The "Steady Helmsman of Finance" openly declared to the world: We intended to achieve currency harvesting, but unexpectedly, we lost more than 200 billion.

The release of this news instantly unsettled the global financial market, as the "Steady Helmsman of Finance" has always been playing a "solo act," and its actions will have a huge impact on the global economy.

People thought that the title of the steady helmsman was merely a commercial reputation, but they did not expect that it would also stumble in monetary policy, which inevitably left the world agape, and many even found this statement hard to believe.

The "Steady Helmsman" of Global Harvesting

The source of this news is the Federal Reserve of the United States. After the news was released, the outside world speculated on the reasons for its unconventional monetary policy.

It is well known that the monetary policy of the Federal Reserve has always played the role of a steady helmsman globally, and our country's monetary policy also refers to the Federal Reserve's policy. Therefore, this news has not only become a hot topic worldwide but has also had a greater impact on our country's economic policies.

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So, what are the reasons for the Federal Reserve's unconventional monetary policy?

This inevitably brings up the impact of the COVID-19 pandemic on the global economy. The domestic economy, even with some decline, was not very severe, and the international economic environment was also relatively good.

However, the emergence of the COVID-19 pandemic has severely affected both domestic and international economic environments.The emergence and spread of the COVID-19 pandemic were extremely rapid. Initially, it was confined to our country, but it soon affected various countries around the world.

In order to effectively control the spread of the pandemic and ensure the health and safety of the people, our country implemented very strict prevention and control measures.

While this helped to control the pandemic, it also severely impacted the domestic economic environment.

As our domestic market was severely affected, the international community was also impacted by our country's pandemic.

As an important part of the global economy, our country is not only a significant base for global manufacturing but also a country with strong consumption capacity in the international market.

After the COVID-19 pandemic was controlled in our country, our domestic economy recovered relatively quickly, and we have a strong ability to withstand risks.

While our country's pandemic was under control, the pandemic in other countries was also gradually slowing down. At that time, the most desired thing for all countries was to restore economic prosperity as soon as possible.

Therefore, the United States began to gradually resume work and production. This was because the domestic pandemic outbreak in the United States was quite severe, and it was also to help the domestic economy of the United States recover as soon as possible.

However, the COVID-19 pandemic not only had a significant impact on the domestic economy but also had a considerable impact on the international economy.

As an important part of the global economy, our country has a huge international influence.The gradual easing of the pandemic in our country has not only helped the domestic economy to resume work and production, but also driven the international economic recovery.

However, due to the extremely serious outbreak of the pandemic in the United States, the road to resuming work and production has not been smooth.

Therefore, unconventional monetary policy has emerged.

The Federal Reserve is an important institution composed of American officials and bankers, and its main members are selected by the President from seven board members.

The Federal Reserve mainly adopts a "centralized" approach. Although the board of directors is the policy-making body of the Federal Reserve, the Federal Reserve also has 12 regional banks in New York, San Francisco, Atlanta, Chicago, St. Louis, Boston, Philadelphia, and other places.

Theoretically, the Federal Reserve will hold 8 monetary policy meetings a year, but when the COVID-19 pandemic is very serious, the Federal Reserve has indicated that it will respond in a timely manner to the disturbances caused by the pandemic in the economy and financial markets.

This is the reason for the Federal Reserve's unconventional monetary policy.

The Federal Reserve has stumbled.

Under the circumstances where the Federal Reserve introduced unconventional monetary policy, its base interest rate was lowered to close to zero, and it also launched an asset-liability table to purchase $20 billion in bonds every week.

However, under these circumstances, American companies are on the brink of bankruptcy. Although our country quickly resumed work and production after controlling the pandemic, the United States has always been in a serious stage of the pandemic.The original intention of the Federal Reserve's policy was to stimulate the recovery of the domestic economy.

However, while stimulating domestic consumption in the United States, it also caused severe disruptions to the global supply chain, as many American companies or companies from other countries had not resumed work and production.

But before the COVID-19 pandemic ended, many vaccines were developed, allowing many countries to seize the opportunity and quickly restore pandemic control measures.

But the reasons for the severe COVID-19 pandemic in the United States are not only due to the large local population, but also due to the consumption awareness of the local American people.

But the COVID-19 pandemic in the United States has not been controlled, and it is still expanding.

Therefore, before the COVID-19 pandemic ended, the United States proposed a request for its Congress to approve monetary policy.

However, the domestic economy of the United States still has not been significantly improved.

At this time, the United States and its domestic economy are still in a crisis, while the COVID-19 pandemic is still spreading and even mutating.

It is precisely because the COVID-19 pandemic in the United States has not been effectively controlled that the global supply chain has been severely disrupted.

After the COVID-19 pandemic, the domestic economy of the United States has not yet recovered.At this point, the United States had already accumulated a massive debt, and in the face of the current economic crisis, the Federal Reserve still sought approval from the U.S. Congress for a new round of monetary policy.

However, the domestic economic crisis in the United States did not receive effective resolution; instead, under the Federal Reserve's monetary policy, the policy to control inflation became difficult to achieve.

Not only that, but our country, with good control over the COVID-19 pandemic, resumed work and production early, and all international production lines returned to their normal tracks.

Due to the impact of the pandemic in the United States, people's consumption consciousness has changed.

People in the United States try to stay out as little as possible, spending less money to buy fewer goods.

But the occurrence of this series of problems is all because the Federal Reserve adopted unconventional monetary policies, allowing the United States to dominate alone, and its intention to harvest globally is very obvious.

But the real result is due to the disturbance of the COVID-19 pandemic, coupled with continuous impacts on the global supply chain, which has not improved the domestic economy of the United States at all, but has also created a massive debt of junk debt.

The original intention was to harvest globally, but it backfired.

Since the United States itself is the world's largest economic entity, the status of the U.S. dollar is almost irreplaceable by any currency.

The liquidity of the U.S. dollar internationally is almost incomparable to any currency in the world.Therefore, the US dollar also holds a very important position in the international market.

Because the United States itself has a certain deficit, and the United States is still continuously expanding its deficit.

But for a long time, our country's economy has also been affected by the Federal Reserve.

Due to our country using the US dollar as our country's reserve currency for a long period of time.

So this causes our country to want to change the reserve of the US dollar, it needs to look at the exchange rate of the US dollar.

However, the Federal Reserve's excessive expansion has now failed to control inflation, which has a very great impact on our country.

The Federal Reserve's intention to start global harvesting is to repay the United States' debt by borrowing funds from other countries, and at the same time, use the burden of other countries to reduce the burden within the United States.

Our country had already released the "Monetary Policy Report of China" in 2010, and the report pointed out that the United States' exaggerated data will have a serious impact on the global economy.

But in 2020, Trump insisted on grabbing economic recovery, thinking that he could harvest the world through the ubiquitous US dollar.

But now the United States has not figured it out, Federal Reserve Chairman Powell has been trying to salvage the out-of-control inflation, but it is also impossible to cover up the reality of the United States' deficit.The United States, due to its large-scale money printing, has exceeded its debt capacity.

Conclusion

Since World War II, the United States' contribution to the international monetary system has not exceeded its expenditure in global GDP business. Therefore, now affected by inflation, the United States has fallen into an unprecedented crisis.

For our country, it is necessary to always remain sober and vigilant.

Minimize dependence on the US dollar and strengthen domestic consumption while expanding international trade.